ABSTRACT
This chapter provides the foundations to project governance and thereby project risk governance based on the principles of corporate governance. Broad guidance is provided to the board to meet its responsibilities: set the strategic direction and monitor organisational performance, engage with the shareholders/stakeholder to determine organisational goals and, importantly, implement an enterprise-wide risk management system. Project risk governance in turn satisfies the responsibility of the board to manage risks and that of project governance to add value to the organisation. The board of directors and senior management are charged with the responsibility to act in the best interests of its shareholders. When deciding on the portfolio of projects and project priorities, financial as well as other criteria are considered. The stakeholder theory of governance takes a broader view of investing in projects since the greater good' is considered. The concept of corporate governance became further formalised when the Organisation for Economic Co-operation and Development (OECD) sought to promote its importance.
